Goal setting

How do you set goals? This is something that I've been thinking about for a couple of years and I still didn't figure out what's the best way to do things.
We all set goals. For our personal life, for our professional path, when it comes to sports or competitions we enter. But my questions is about how high should be this goal? Should we believe that impossible is nothing? How far should we go with our optimism?
Personally, I don't believe in "Aim for the moon. Even if you don't reach it, you'll land among the stars". I think that we should set goals according to our internal resources: our commitment, our ambition, our willingness to sacrifice things for what we want.

It took me a while to admit that this is what I believe in. And I think setting goals you can reach builds self confidence and it leads to growth step by step. And I am convinced that by having more self confidence, any person will challenge himself/herself even more and more and in the end have really high standards.